The number of elderly persons subject to neglect, abuse and financial exploitation will surge in coming years due to the aging baby boomer generation, according to a November 29, 2010 report in The Post and Courier. Nationally, little has been done to protect the incapacitated elderly population, which will surge to 71 million – double the number of persons 65 and older today – by the year 2030.
Guardianships – a legal arrangement in which an appointed person serves to make decisions regarding finances and/or healthcare – have to date been the best source of personal protection for the elderly, but a lack of training and monitoring has contributed to a failure of this system in many instances. A September study conducted by the General Accounting Office (GAO), the investigative arm of Congress, found that “there continue to be instances where some guardians have taken advantage of the elderly people they are supposed to protect.”
This isn’t the first warning regarding a lack of protection for the elderly. The GAO issued a similar report in 2004, which made little impact in relation to regulatory changes that would improve monitoring and training for court-appointed guardians. This time around, however, some states are taking notice. South Carolina, which has an elderly population higher than the national average, is considering modifications to the state’s probate code regarding how the courts handle cases of elderly abuse and neglect. Other states will likely follow, which will improve the security of guardianship services as a valuable tool to protect incapacitated elderly persons in the coming years.
Protecting the interests of our elders
Guardianships exist to help protect the elderly from financial exploitation and abuse, particularly in cases in which there are no family members who can serve in the role. A person appointed by the individual or the court oversees financial and/or healthcare decisions, including decisions involving placement in assisted living or skilled nursing care, including oversight of care received for persons already residing in senior living communities.
There are three legal documents that all incapacitated elderly people should obtain to protect their assets: A last will and testament describes how possessions will be distributed, typically handled by a designated executor. A durable power of attorney assigns a person to handle finances and contractual relationships in the event that the person becomes incapacitated. Finally, a healthcare power of attorney (POA) and living will designates a person to handle medical decisions in the event that the person becomes incapable of healthcare decision-making.
It is also important to preserve the incapacitated elderly’s ability to obtain Medicaid coverage, which is contingent on a person meeting financial eligibility criteria. Those who have five years to plan can use an irrevocable trust established by an attorney, which can protect assets from consideration and avoid the need to “spending down” in order to qualify. Assets are transferred into the trust and — after five years — assets held in the trust cannot be counted when applying for Medicaid.
An outright gift can be given to the guardian which will protect half of a person’s assets if application for Medicaid is likely to occur prior to five years in the future. The other half may be protected by a Medicaid annuity. This technique can be used immediately, even if the individual is already receiving long-term nursing care.
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